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T2 Partners' Whitney
Tilson took a royal shellacking by being short
Netflix during its ridiculous run up within the last year.
He was right in his thesis, wrong in his timing.

He was eventually forced to cover the short position when the
stock was trading at around $230. The stock eventually topped out
above $300 in July and has since plummeted in spectacular
fashion. During Monday's session, NFLX shares are trading over 7%
higher at $76.15. Shares have been down about 75% since July.

However today, dealReporter released a note saying that
Amazon or Verizon may be in the works to buyout
Netflix.
Amazon as
a potential acquirer is not new news, as rumors of
a takeover by Amazon has been around for
quite some time.

In a Reuters
exclusive, it has been revealed that the new service could be
introduced in the coming year. While this information has yet to
be confirmed – Verizon has not made any official announcements –
two of Reuters' sources claim the service could be limited in
scope.

Benzinga reached out to T2 Partners for their thought about these
takeover rumors.

"We did not buy into Netflix because of M&A possibilities, we
bought into them because of valuation," Glenn Tongue, Managing
Partner at T2 Partners, told us. "However, when news broke of
Verizon to develop a streaming service, it made our position in
Netflix intriguing."

"While we do not believe that Amazon or Verizon will make any
substantial offer to Netflix, it does make for a
possible positive catalyst going forward," Tongue continued.
"We do not believe Netflix will accept any offer around current
valuation."

When T2 Partners originally bought into Netflix, Tilson said that
the current position is not a "mega position," and on any number
of metrics, he believes Netflix is cheap. It went from a $16
billion market cap just a few months ago to about $4 billion
today. He believes it is a strong company, and that the selling
is way over done here.

Glenn Tongue continued on to say, "We have been incrementally
adding to our original position, though not in large amounts."

He went on to say, "The bears in Netflix do not understand the
subscriptions-based model."

Whatever the case may be, Netflix is trading at a 17x
price-to-earnings ratio, which is very low for a company with the
growth that Netflix has. Netflix hit 52-week lows of $62.37 last
month.